Investment in enterprise systems resources is expected to improve performance of firms (Davenport, 1998; Davenport, 2000; Shang and Seddon 2002; and Beard et al., 2004) and firms do invest in these resources enormously (Hitt et al., 2002) to improve their performance. In spite of making huge investments, there exists wide disparity in benefit realization (Davenport, 2000; Kalling, 2003; Beard et al., 2004; Karimi et al., 2007; and Radhakrishnan et al., 2008). With so much disparity in performance, the firms today are caught in a dilemma between the perceived need of ‘enterprise systems’ implementation and the challenge of benefit realization from these expansive systems (Beard et al., 2004). Much of the research done in this area is conceptual or case-based (Beard et al., 2004) that lack wider applicability (Yin, 2002). Besides, these limited studies have been undertaken in the western context, and as such, there exists a need for empirical investigation in this regard that has wider applicability in the context of developing countries like India. Consequently, the present research paper tries to fill this gap by developing a conceptual model grounded in the resource-based view of firms to assess the paradoxical observations persisting between enterprise systems resources and firm performance at individual level.
Mere possession of Enterprise Systems (ES) resources cannot be associated with improved performance as these resources come with generic processes and have become like a commodity based on standards that all firms can freely use (Carr, 2003 and 2005). But as these resources promise seamless integration of data and processes, the integration capabilities, if developed adequately by various firms, can contribute to differentiating performance.
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